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Money: The bear market endures, yet the S&P 500 index rose more than 17 percent from mid-June to mid-August. Don’t even try to guess what will happen next, our columnist says.

The stock market fell so sharply at the beginning of the year that it felt at times as if it would never come back.

But it did, in a weekslong rally that lasted through mid-August and would have been more widely celebrated if stocks had not plummeted so badly in the first place.

Now, for the last week or two, the market has been wobbly, with no clear trend in sight.

What should investors do about these head-spinning changes in the market’s direction?

In a word: nothing.

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Ignoring the shifts in the markets was my main advice for long-term investors throughout the winter when stocks were cratering. And I’m sticking with it.

Looking back

As it turns out, doing nothing was the second-best advice anyone could have given you for investing in the overall stock market this year.

The very best advice would have required a crystal ball: You should have sold precisely on Jan. 3, when the S&P 500 stock index was at its peak, and bought on June 16, when it hit bottom. (Then, quite possibly, you should have sold again on Aug. 16, before the market turned rocky. The verdict is still out on that one.)

If you made all of those moves, more power to you. Please get in touch and explain how you managed that perfect trick of market timing, and how you’re going to pull it off the next time.

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For most of us, buying and selling at the right moment isn’t going to happen regularly enough to beat the market.

Instead, this year shows why it’s better, for the vast majority of people, to take a longer-term approach. Once you have set up a solid investing plan, using low-cost index funds for steady purchases of stocks and bonds, you can do absolutely nothing.

A sharp decline, and then

Let’s recap what has happened this year.

The stock market was terrible for months. In fact, through June, it was the worst first half of a year since 1970, as this newspaper, and many others stated.

High inflation, war, rising interest rates, and the threat of recession contributed to the dismal performance, and rising rates meant that prices in the bond market (which move in the opposite direction) fell, too.

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But the handy periodization used by both Wall Street and journalism — focusing on the first half of the year — obscured a major shift in the stock market.

Yes, for more than five months from the market’s peak on Jan. 3, the trend was unmistakably downward. After June 16, however, the market turned around, though, of course, it wasn’t immediately clear that it was happening.

An often overlooked rally

Consider a few numbers.

From Jan. 3 through June 16, the S&P 500 fell 23.6 percent, below the 20 percent threshold that denotes a bear market, in finance jargon.

The big declines got everyone’s attention.

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What didn’t get nearly as much attention was the move that began on June 17. Stocks started climbing — and kept doing so for two months. From its bottom through Aug. 16, the S&P 500 gained 17.4 percent; with dividends, it returned 17.7 percent. That’s a whopping two-month return.

It would be an exaggeration to claim that nobody noticed. But it’s fair to say the market’s rise wasn’t chronicled nearly as widely as its fall. Many investors may not have even realized that stocks were steadily rising.

One reason for this is entirely sensible: Math is unpleasant. When the market’s value declines by nearly a quarter, it must increase much more than that — by 31 percent, in this case — to return to its former level. The 17.4 percent climb left stocks well below their peak. You still lost money, just not as much.

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Another reason for the relative neglect is that the S&P 500 is still in a bear market.

Customarily, a bear market continues until the last peak of the previous bull market has been recaptured. You won’t see headlines about a new bull market until the S&P 500 reaches its Jan. 3 peak, which, according to Howard Silverblatt, senior index analyst for S&P Dow Jones Indices, was 4,796.56. As of Thursday’s close, the index stood at 4,199.12.

So if you don’t follow the markets closely, it is understandable if you didn’t notice that the 17.4 percent rally ever happened.

You didn’t miss much. The uncertainty in the stock market and, more important, in the greater economy has not ended. Not at all.

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Problems with predictions

The Federal Reserve says it intends to keep raising short-term interest rates to stave off raging inflation For now, that seems to me to be the right approach, despite the problems that higher interest rates will cause businesses and working people, who may lose jobs if the Fed persists and the economy contracts.

Inflation may have already peaked. Gasoline is under $4 a gallon in the New York area, where I live, for the first time since March, and that kind of good news is being experienced by drivers all over the country.

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